exv10w2



 





Exhibit 10.2




SECOND AMENDMENT TO CREDIT AND SECURITY AGREEMENT




     This Amendment, effective as of March 26, 2004, is made by and between
SCHUFF INTERNATIONAL INC., a Delaware corporation and the other Persons listed
in Schedule 1.1 (collectively, the “Borrower”), and WELLS FARGO CREDIT, INC., a
Minnesota corporation (the “Lender”).



RECITALS




     The Borrower and the Lender are parties to a Credit and Security Agreement
dated as of August 13, 2003, as supplemented by a Post-Closing Items Agreement
of that same date, and amended by an Amendment to Credit and Security Agreement
and Waiver of Defaults dated as of November 3, 2003 (as supplemented, the
“Credit Agreement”). Capitalized terms used in these recitals have the meanings
given to them in the Credit Agreement unless otherwise specified.



     The Borrower has requested that certain amendments be made to the Credit
Agreement, which the Lender is willing to make pursuant to the terms and
conditions set forth herein.



     NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, it is agreed as follows:



     1. Defined Terms. Capitalized terms used in this Amendment which are
defined in the Credit Agreement shall have the same meanings as defined
therein, unless otherwise defined herein.



     2. Amendments to Credit Agreement. The Credit Agreement is amended as
follows:



(a) Sections 6.2(a) through 6.2(d) of the Credit Agreement are amended to
read as follows:




(a) Minimum Debt Service Coverage Ratio. The Borrower, on a
consolidated basis with its Subsidiaries, will maintain, during each
period described below, its Debt Service Coverage Ratio, determined as at
the end of such period, at not less than the ratio set forth opposite
such period:



	 	 	 	 	 
	 	 	Minimum Debt
	 	 	Service Coverage
	Period
	 	Ratio

	1/1/04 through 3/31/04
	 	 	0.85 to 1.00	 
	1/1/04 through 6/30/04
	 	 	0.90 to 1.00	 
	1/1/04 through 9/30/04
	 	 	1.00 to 1.00	 
	1/1/04 through 12/31/04
	 	 	1.10 to 1.00	 








         (b) Minimum Book Net Worth. The Borrower will maintain its Book Net
Worth, determined as at the end of each month through December 31, 2004,
at an amount not less than $8,500,000.



 









 






         (c) Minimum Monthly Stop Loss. The Borrower will not permit the Net
Loss of Borrower and its Subsidiaries on a consolidated basis to exceed
$500,000 in the aggregate in any one month or $1,000,000 in the aggregate
during any two consecutive months during the Borrower’s 2004 fiscal year.




         (d) Capital Expenditures. The Borrower and its Subsidiaries will
not in the aggregate incur or contract to incur unfinanced Capital
Expenditures of more than $1,500,000.00 in the aggregate during its 2004
fiscal year.




         (b) Section 6.28 of the Credit Agreement is amended to read as follows:




         Section 6.28. Senior Notes. Without the consent of the Lender,
which consent may not be unreasonably withheld, the Borrower will not
purchase or prepay any of Senior Notes if at the time of such purchase or
prepayment, or after immediately giving effect thereto, any Default
Period exists; provided that purchases and prepayments of Senior Notes
and purchases, redemptions and retirements of the capital stock or other
ownership interests of the Borrower shall not exceed $1,000,000 in any
fiscal year and shall not be made, directly or indirectly, from the
proceeds of a Revolving Advance or restricted Cash.



       3. No Other Changes. Except as explicitly amended by this Amendment, all
of the terms and conditions of the Credit Agreement shall remain in full force
and effect and shall apply to any advance or letter of credit thereunder.



       4. Conditions Precedent. This Amendment, shall be effective when the
Lender shall have received an executed original hereof, together with each of
the following, each in substance and form acceptable to the Lender in its sole
discretion:



              
(a) The Acknowledgment and Agreement of Guarantors set forth at the end of
this Amendment, duly executed by each Guarantor.



              
(b) Such other matters as the Lender may require.



  
    5. Representations and Warranties. The Borrower hereby represents and
warrants to the Lender as follows:


              
(a) The Borrower has all requisite power and authority to execute this
Amendment and to perform all of its obligations hereunder, and this Amendment
has been duly executed and delivered by the Borrower and constitutes the legal,
valid and binding obligation of the Borrower, enforceable in accordance with
its terms.



              
(b) The execution, delivery and performance by the Borrower of this
Amendment have been duly authorized by all necessary corporate action and do
not (i) require any authorization, consent or approval by any governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, (ii) violate any provision of any law, rule



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or regulation or of any order, writ, injunction or decree presently in
effect, having applicability to the Borrower, or the articles of incorporation
or by-laws of the Borrower, or (iii) result in a breach of or constitute a
default under any indenture or loan or credit agreement or any other agreement,
lease or instrument to which the Borrower is a party or by which it or its
properties may be bound or affected.




         (c) All of the representations and warranties contained in Article V of
the Credit Agreement are correct on and as of the date hereof as though made on
and as of such date, except to the extent that such representations and
warranties relate solely to an earlier date.



     6. References. All references in the Credit Agreement to “this Agreement”
shall be deemed to refer to the Credit Agreement as amended hereby; and any and
all references in the Security Documents to the Credit Agreement shall be
deemed to refer to the Credit Agreement as amended hereby.



     7. No Waiver. The execution of this Amendment and acceptance of any
documents related hereto shall not be deemed to be a waiver of any Default or
Event of Default under the Credit Agreement or breach, default or event of
default under any Security Document or other document held by the Lender,
whether or not known to the Lender and whether or not existing on the date of
this Amendment.



     8. Release. The Borrower, and each Guarantor by signing the Acknowledgment
and Agreement of Guarantors set forth below, each hereby absolutely and
unconditionally releases and forever discharges the Lender, and any and all
participants, parent corporations, subsidiary corporations, affiliated
corporations, insurers, indemnitors, successors and assigns thereof, together
with all of the present and former directors, officers, agents and employees of
any of the foregoing, from any and all claims, demands or causes of action of
any kind, nature or description, whether arising in law or equity or upon
contract or tort or under any state or federal law or otherwise, which the
Borrower or such Guarantor has had, now has or has made claim to have against
any such person for or by reason of any act, omission, matter, cause or thing
whatsoever arising from the beginning of time to and including the date of this
Amendment, whether such claims, demands and causes of action are matured or
unmatured or known or unknown.



     9. Costs and Expenses. The Borrower hereby reaffirms its agreement under
the Credit Agreement to pay or reimburse the Lender on demand for all costs and
expenses incurred by the Lender in connection with the Loan Documents,
including without limitation all reasonable fees and disbursements of legal
counsel. Without limiting the generality of the foregoing, the Borrower
specifically agrees to pay all fees and disbursements of counsel to the Lender
for the services performed by such counsel in connection with the preparation
of this Amendment and the documents and instruments incidental hereto. The
Borrower hereby agrees that the Lender may, at any time or from time to time in
its sole discretion and without further authorization by the Borrower, make a
loan to the Borrower under the Credit Agreement, or apply the proceeds of any
loan, for the purpose of paying any such fees, disbursements, costs and
expenses.



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     10. Miscellaneous. This Amendment and the Acknowledgment and Agreement of
Guarantors may be executed in any number of counterparts, each of which when so
executed and delivered shall be deemed an original and all of which
counterparts, taken together, shall constitute one and the same instrument.



     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed as of the date first written above.



	 	 	 	 	 	 	 
	 	 	 	 	SCHUFF INTERNATIONAL, INC., a
	WELLS FARGO CREDIT, INC.	 	Delaware corporation
	 
	 	 	 	 	 	 
	By

	 	/s/ Joseph A. Lisack	 	By	 	/s/ Scott A. Schuff
	

	 	

	 	 	 	

	Print Name: Joseph A. Lisack	 	 	 	Scott A. Schuff
	Its Assistant Vice President	 	 	 	Its President
	 
	 	 	 	 	 	 
	 	 	 	 	SCHUFF STEEL COMPANY, a
	 	 	 	 	Delaware corporation
	 
	 	 	 	 	 	 
	

	 	 	 	By	 	/s/ Scott A. Schuff
	

	 	 	 	 	 	

	

	 	 	 	 	 	Scott A. Schuff
	

	 	 	 	 	 	Its President
	 
	 	 	 	 	 	 
	

	 	 	 	By:	 	/s/ Michael R. Hill
	

	 	 	 	 	 	

	

	 	 	 	 	 	Michael R. Hill
	

	 	 	 	 	 	Its: Vice President and CFO
	 
	 	 	 	 	 	 
	 	 	 	 	BANNISTER STEEL, INC., a California
	 	 	 	 	corporation
	 
	 	 	 	 	 	 
	

	 	 	 	By:	 	/s/ Scott A. Schuff
	

	 	 	 	 	 	

	

	 	 	 	 	 	Scott A. Schuff
	

	 	 	 	 	 	Its: Vice President
	 
	 	 	 	 	 	 
	 	 	 	 	ADDISON STEEL, INC., a Florida
	 	 	 	 	corporation
	 
	 	 	 	 	 	 
	

	 	 	 	By:	 	/s/ Scott A. Schuff
	

	 	 	 	 	 	

	

	 	 	 	 	 	Scott A. Schuff
	

	 	 	 	 	 	Its: Vice President







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	 	 	 	 	QUINCY JOIST COMPANY, a Delaware
	 	 	 	 	corporation
	 
	 	 	 	 	 	 
	

	 	 	 	By:	 	/s/ Scott A. Schuff
	

	 	 	 	 	 	

	

	 	 	 	 	 	Scott A. Schuff
	

	 	 	 	 	 	Its: Vice President
	 
	 	 	 	 	 	 
	 	 	 	 	SIX INDUSTRIES, INC., a Delaware
	 	 	 	 	corporation
	 
	 	 	 	 	 	 
	

	 	 	 	By:	 	/s/ Scott A. Schuff
	

	 	 	 	 	 	

	

	 	 	 	 	 	Scott A. Schuff
	

	 	 	 	 	 	Its: Vice President
	 
	 	 	 	 	 	 
	 	 	 	 	ON-TIME STEEL MANAGEMENT
	 	 	 	 	HOLDING, INC., a Delaware corporation
	 
	 	 	 	 	 	 
	

	 	 	 	By:	 	/s/ Michael R. Hill
	

	 	 	 	 	 	

	

	 	 	 	 	 	Michael R. Hill
	

	 	 	 	 	 	Its: Secretary and Treasurer







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ACKNOWLEDGMENT AND AGREEMENT OF GUARANTORS




     The undersigned, each a guarantor of the indebtedness of Schuff
International, Inc. (the “Borrower”) to Wells Fargo Credit, Inc. (the “Lender”)
pursuant to a separate Guaranty dated as of August 13, 2003 (each, a
“Guaranty”), hereby (i) acknowledges receipt of the foregoing Amendment; (ii)
consents to the terms (including without limitation the release set forth in
paragraph 8 of the Amendment) and execution thereof; (iii) reaffirms his or its
obligations to the Lender pursuant to the terms of his or its Guaranty; and
(iv) acknowledges that the Lender may amend, restate, extend, renew or
otherwise modify the Credit Agreement and any indebtedness or agreement of the
Borrower, or enter into any agreement or extend additional or other credit
accommodations, without notifying or obtaining the consent of the undersigned
and without impairing the liability of the undersigned under his or its
Guaranty for all of the Borrower’s present and future indebtedness to the
Lender.


	 	 	 	 	 
	 	ON-TIME STEEL MANAGEMENT, INC., a 

Delaware corporation

 	 
	 	By:  	/s/ Daniel T. Kneifl	 
	 	 	Daniel T. Kneifl, President 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	ON-TIME STEEL MANAGEMENT – NORTHWEST L.L.C., a Delaware limited liability

company

 	 
	 	By:  	/s/ Michael R. Hill	 
	 	 	Michael R. Hill, Manager 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	 	 
	 	By:  	
/s/ Scott Sherman	 
	 	 	Scott Sherman, Manager 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	ON-TIME STEEL MANAGEMENT – COLORADO L.L.C., a Delaware limited liability company

 	 
	 	By:  	/s/ Michael R. Hill	 
	 	 	Michael R. Hill, Manager 	 
	 	 	 	 
	 



	 	 	 	 	 
	 	 	 
	 	By:  	
/s/ Scott Sherman	 
	 	 	Scott Sherman, Manager 	 
	 	 	 	 
	 



	 	 	 	 	 














 






	 	 	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 



SCHEDULE 1.1




Schuff International, Inc., a Delaware corporation

Schuff Steel Company, a Delaware corporation

Bannister Steel, Inc., a California corporation

Addison Steel, Inc, a Florida corporation

Quincy Joist Company, a Delaware corporation

Six Industries, Inc., a Delaware corporation

On-Time Steel Management Holding, Inc., a Delaware corporation